How to use this calculator
- Enter the current share price and days to expiration.
- Enter the put spread - short put strike, long put strike, and its net credit.
- Enter the call spread - short call strike, long call strike, and its net credit.
- Set the number of contracts - each multiplies credit and risk by × 100.
- Read the result: net credit, max profit, max loss, both breakevens, and return on risk.
What it tells you: whether an iron condor's combined credit justifies the defined risk, and the price range the stock must stay inside to keep it.
How this calculator works
An iron condor is two credit spreads sold at once: a bull put spread below the stock and a bear call spread above it, sharing one expiration. You sell the two inner strikes (the short put and short call) and buy the two outer strikes (the long put and long call) as wings. The total premium you collect is the sum of the two spread credits.
Enter the four strikes and the credit on each spread and the calculator returns the full picture. Max profit is the total net credit times 100 per contract, kept when the stock finishes between the short strikes and all four options expire worthless. Max loss is the wider spread's width minus the total credit, times 100 — because at expiration the stock can only be in one tail, only one side can ever be breached.
The two breakevens mark the edges of the profit zone: the lower one is the short put strike minus the total credit, the upper one is the short call strike plus the total credit. The calculator also shows how wide that profit zone is in dollars and as a percentage of the current price, plus the return on risk and its annualized equivalent. The payoff diagram shows the classic flat-topped tent: a profit plateau in the middle and capped losses on both wings.
Iron condor vs short strangle
Both bet that a stock stays range-bound, but they handle risk very differently. A short strangle sells a put and a call with nothing behind them — you collect more premium, but the loss is theoretically unlimited on the call side and very large on the put side, and the margin is heavy. An iron condor buys a long put and a long call further out, converting those open-ended tails into a fixed, known maximum loss and freeing up most of the capital.
For most retail accounts the condor is the more sensible structure: you give up some premium in exchange for a loss you can actually survive, and you can size positions by the defined risk rather than by margin that can balloon when volatility spikes.
Worked example
A fixed, hypothetical illustration — not live market data.
A hypothetical stock trades at $100. With 30 days to expiration you sell the 90/85 put spread for a $0.80 credit and the 110/115 call spread for a $0.80 credit — $1.60 total. Both wings are $5 wide.
- Net credit / max profit: $1.60 × 100 = $160 per contract.
- Max loss: ($5 − $1.60) × 100 = $340 per contract.
- Lower breakeven: $90 − $1.60 = $88.40.
- Upper breakeven: $110 + $1.60 = $111.60.
- Profit zone: $88.40 to $111.60 — about $23.20 wide, or 23.2% of the price.
- Return on risk: $160 ÷ $340 ≈ 47% over 30 days.
Edge cases this calculator handles
An iron condor has two spreads and four strikes, and the subtle cases are exactly where a naive max-loss number goes wrong. This calculator gets them right.
- Only one side can be breached. At expiration the stock finishes in one tail, so max loss is the wider spread's width minus the total credit — not both spreads added together, which is the most common over-statement of condor risk.
- Unequal wings. If your two spreads are different widths, the panel flags it and the max loss is taken from the wider side, since that is the one that can actually be tested.
- A position already being tested. If the price sits beyond a short strike, the results flag which side is under pressure rather than silently showing a clean max-profit credit.
- A credit that is too large to be real. If the total credit meets or exceeds the wider spread width — an impossible fill — the calculator refuses it and asks you to recheck, instead of printing a negative risk.
- Zero days to expiration. Annualized return on risk shows "N/A" rather than dividing by zero.
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Common mistakes
- Selling condors when volatility is low. Thin premium means a narrow profit zone for the same risk. The IV Rank tool helps you check whether premium is rich first.
- Setting the short strikes too close. A tight body collects more credit but is breached far more often. Match the width of the profit zone to how much the stock actually moves.
- Forgetting the four-leg commission drag. Opening is four contracts, and closing can be four more — a real cost on a modest credit.
- Holding through earnings unintentionally. An earnings date inside the expiration can blow through a short strike overnight. Know your event calendar.
- Assuming both sides can lose. They cannot at expiration — the max loss is the wider wing minus the credit, not the sum of both spreads.
Frequently asked questions
What is an iron condor?
An iron condor is a four-leg, market-neutral options trade: a bull put spread below the current price and a bear call spread above it, in the same expiration. You sell the two inner (short) strikes and buy the two outer (long) strikes for protection, collecting a net credit. It profits when the stock stays between the two short strikes through expiration, and its risk is defined by the wings.
How is the max loss on an iron condor calculated?
Max loss = (wider spread width − total net credit) × 100 per contract. At expiration the stock can only finish in one tail — either below the put spread or above the call spread — so only one side can be breached. The loss is therefore based on the wider of the two spreads, not the sum of both.
What are the two breakevens on an iron condor?
Lower breakeven = short put strike − total net credit per share. Upper breakeven = short call strike + total net credit per share. The stock is profitable at expiration anywhere between those two prices; outside them the position loses, up to the capped max loss.
Iron condor vs strangle — what is the difference?
A short strangle sells a put and a call with no protective wings: more premium, but undefined risk and large margin. An iron condor adds a long put and a long call further out, which caps the loss on both sides and dramatically reduces the capital required. The condor trades some premium for defined risk — usually the better choice for retail accounts.
When does an iron condor make its maximum profit?
Maximum profit — the full net credit — is reached when the stock closes between the short put and short call strikes at expiration, so all four options expire worthless. You keep the entire credit and the long options you bought simply expire unused.
Should the put and call wings be the same width?
They often are (a "balanced" condor), which keeps the max loss the same on either side. You can run unequal wings, but then the max loss is set by the wider spread, since that side risks more. This calculator always uses the wider width so the max loss it shows is the true worst case.
Do I hold an iron condor to expiration?
Many traders close early — often once the position has captured roughly 25–50% of the maximum credit — to bank the gain and avoid the sharp gamma and pin risk near the short strikes in the final days. Holding to expiration is possible but exposes you to a late move through a short strike and to assignment risk.
When should I use an iron condor?
When you expect a stock or index to stay in a range and implied volatility is high enough to pay you well for selling both sides - you collect a credit from an out-of-the-money put spread and call spread, and keep it if the price stays between them. It is the textbook rangebound, high-IV, defined-risk income trade, best on liquid underlyings with no catalyst before expiration. Skip it when you expect a real move or a trend, and especially through earnings: the entire edge is that nothing happens, so a gap straight through one of your short strikes is exactly what it cannot survive cheaply.
Related tools and guides
An iron condor is two credit spreads — model one side on its own with the Bull Put Spread Calculator, or build any custom structure with the Payoff Diagram Builder.
Condors work best when premium is rich — check first with the IV Rank Calculator, and look up any term in the options glossary. Weighing it against the higher-credit cousin? See Iron Condor vs Iron Butterfly. New to the structure? Start with What is an iron condor?
Educational tool only. Nothing here is financial advice. Defined-risk does not mean low-risk: iron condors lose their full max loss when a stock trends out of the range, and early assignment or pin risk near a short strike can change the real-world outcome. Size positions accordingly.